Update input cost matrix for Mahlkow and Wanner (2021) — update_input_cost_mw

Updates cost of input bundle as in Caliendo & Parro (2015) equation (10), with intermediate inputs at tax-inclusive prices.

update_input_cost_mw_2021(
  input_cost_change,
  wage_change,
  productivity_change,
  price_change,
  tax_change,
  factor_share,
  intermediate_share,
  model_dimensions
)

Arguments

input_cost_change: Matrix of input cost changes, dimensions: country x sector.
wage_change: Vector of change in wages, dimension: country.
productivity_change: Matrix of change in productivity, dimensions: country x sector.
price_change: Matrix of price index changes, dimensions: country x sector.
tax_change: Matrix of tax wedge changes, dimensions: country x sector.
factor_share: Matrix of input factor shares, dimensions: country x sector.
intermediate_share: Array of input-output coefficients, dimensions: country x input x output.
model_dimensions: List of model dimensions.

Value

Matrix of changes in input costs, dimensions: country x sector.